Food inflation falls by 2.2 percentage points to 10.72% in January

Food inflation in Bangladesh continued its declining trend in January, dropping by 2.2 percentage points to 10.72% in January, according to the latest data from the Bangladesh Bureau of Statistics (BBS).

Food inflation was recorded at 12.92% in December and 13.8% in November. 

The drop in food inflation has resulted in an overall inflation reduction of 0.95 percentage points to reach 9.94% in January.

However, non-food inflation has increased slightly to 9.32% in January from 9.26% in December. 

Speaking about the drop in food inflation, BBS Director General Mohammed Mizanur Rahman told The Business Standard that the drop in food inflation is attributed to a surge in commodity supply during the winter season.

Centre for Policy Dialogue Executive Director Fahmida Khatun also echoed a similar opinion, stating that the increase in food delivery has helped curb the inflation rate in January.

She also mentioned that the monetary policy introduced by the central bank has started to have its effect on the market, which also contributed to the drop in inflation.

"In January, the main driving force to reduce inflation was food products. Inflation has come down due to increased availability, production and supply of food products, she said.

"At the same time," she added, "the monetary policy has also started working." 

She noted that it is not possible for the monetary policy alone to reduce inflation if the issues on the supply side are not addressed.

"Now it is seen that the supply of food products and other products has also increased. Production of agricultural products is improving," said the CPD executive director.

However, she emphasised resolving two more issues to further reduce inflation. 

"Prices of products increase due to extortion and rent-seeking at different levels in the supply chain. If emphasis is placed on these two issues, inflation will come under more control."

The inflation rate has been dropping in recent months but still remains high, making it hard for low-wage earners to afford daily essentials.

BBS data shows that monthly overall inflation has remained above 9% for over two and a half years.

Earlier on the day, speaking after a meeting of the Cabinet Committee on Government Purchases at the Secretariat, Finance Adviser Salehuddin Ahmed said it will take another two to three months for inflation to decrease as government measures take effect.

Acknowledging that high inflation is causing difficulties, he said several initiatives have already been implemented to address the issue.

The adviser also stated that further steps would be taken to stabilise the prices of essential commodities during Ramadan.

The government expects these measures to help bring average inflation down to 6%–7% by June.